When the Music's over -

When the Music’s Over

Over the last two years I have had the opportunity to speak at many national conferences that cater to our healthcare community including physicians and healthcare providers such as homecare and hospice. Among the subjects I spoke about were hiring top talent, customer service, leadership and other topics associated with the overall functioning of healthcare companies and doctors’ practices. What surprised me during these events was the number of physicians and owners who approached me with questions concerning the sale of their organizations.

My recruiting and consulting firm, Optimum RTS, was able to adjust very quickly to that need and through our strategic partnerships we were able to assist many different organizations prepare their practice for an exit and to get under contract in a matter of just a few months.

When selling a practice, it is natural to think that the sale price is the most important aspect. What helps drive the valuation north is the proper preparation of the practice and the transition plan that is meaningful to the buyer.. Prepare yourself mentally to sell 1-3 years before you truly want to retire.?One example of this is a recently closed sale on an allergy and immunology office. The Doctor had two offices and the new owners not only retained the current staff, but also added a new Doctor to the practice while keeping the selling Doctor on for an additional year to help with the transition. This process protects the patient base and ensures the smooth transition of the practice. What the Doctor really loves about these sales, besides the selling price, is that the organization that bought his office has other holdings around the country and will allow him to work Locum Tenens in any of their other offices as he wishes. This allows the Doctor and his wife to travel the country by taking an assignment in Colorado or California for a few weeks, then staying for the following month all while funding their stay and writing off some of their expenses.

Another consideration for these sales were the types of services and reimbursements that the office was able to capture. Buyers like dependability in revenue sources, so when it comes to Biologics, they scrutinized those revenues a little more than predictable office and procedure visits. This does not mean they will not determine a sales price with a multiplier of those revenues, but they may structure the buyout at closing a little differently and hold some of those funds until it is proven that the Biologics revenue stream is stable. This is exactly what we are seeing with another allergy practice that is generating more than 50% of their revenue from Biologics.

Lastly, and one of the biggest impact Doctors are thinking about is staying ahead of any new changes being discussed to the capital gains taxes. It seems apparent that these changes have a good chance of going into effect by the end of the year and possibly (but will probably be negotiated out of any new law) even be backdated to September 1st, 2021. Obviously, any change in capital gains will end up being born by the seller and could mean the difference in tens of thousands of dollars in the actual take-home for your family and/or retirement account.

These are just three considerations and only the beginning of a conversation we can have.

If you would like to further this discussion, please feel free to contact me directly.

John Dalton (954)336-4086

?[TL1]John, this is a good example and important for a practice like Sr. Siegel’s to understand.?Just know this would not apply (Biologics/Gamma) to many practices outside of Allergy, ENT or Derm.